Company Number: 12530640

Analysis Date: 2025-07-29 18:28 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Allen Construction Midlands Limited shows modest working capital and equity levels with positive net current assets in the latest year. However, the company’s financial position has significantly weakened compared to the 2020 and 2021 financial years where net current assets and shareholders’ funds were substantially higher. The current year net current assets are only £1,293, and cash holdings are minimal (£149), indicating tight liquidity. Given the low cash reserves and small equity base, the company may be vulnerable to cash flow pressures despite being operational and up to date with filings. Approval for credit facilities should therefore be conditional on enhanced monitoring and possibly limits on exposure until financial stability improves.

2. Financial Strength: Weakening Balance Sheet
   The balance sheet reveals a substantial decline in net current assets and shareholders’ funds over the past 3 years, from over £40k to just over £1k. Current liabilities have increased markedly, from around £11k in 2020 to £41k in 2024, while current assets have not kept pace. The company operates with very low cash balances and relies heavily on trade debtors (£42,999) to fund short-term liabilities. The share capital is nominal (£100), indicating limited shareholder equity injection. The weakening equity and working capital position suggest reduced financial resilience.

3. Cash Flow Assessment: Constrained Liquidity
   Cash at bank is negligible (£149), which is insufficient to cover immediate liabilities (£41,855). The business appears to be relying on collections from debtors to meet short-term obligations, posing risk if debtor payments are delayed. The company employs only one person (the director), limiting fixed overheads but also indicating a very lean operation. The absence of a loan balance from the director at year end suggests no current internal financing support. Overall, liquidity is tight and could impair ability to meet unexpected expenses.

4. Monitoring Points:

• Track cash balances monthly to ensure sufficient liquidity.
• Monitor debtor collection periods closely to avoid cash flow bottlenecks.
• Watch changes in current liabilities, particularly tax and other creditors, for signs of payment delays.
• Review profit and loss performance once available to assess operational profitability trends.
• Assess any new capital injections or external financing to strengthen the balance sheet.